President Bola Tinubu’s administration, on Saturday announced that Nigeria had secured a loan of $2.25 billion from the World Bank at a single-digit interest rate.
The package includes a 40-year term with a 10-year moratorium and a nominal interest rate of 1 percent.
During a press briefing in Washington DC, United States, Wale Edun, Nigeria’s Minister of Finance, disclosed this information, marking the conclusion of Nigeria’s engagements at the World Bank/International Monetary Fund Spring meeting.
He stated that Nigeria has secured a comprehensive package totaling $2.25 billion, likening it to the closest thing to a free lunch.
Describing it as practically a grant, Edun explained that the loan spans about 40 years, with a 10-year moratorium and approximately 1% interest.
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He also highlighted additional advantages for Nigeria, including budgetary support and access to low-interest funding from the African Development Bank.
Furthermore, he mentioned ongoing negotiations with foreign direct investors across various sectors.
He said:
“We have qualified for the processing just this week to the Board of Directors of the World bank of a total package of $2.25 billion of what you can call ‘the closest you can get to a free lunch’- virtually a grant. It’s for about 10- 20 years moratorium and about 1% interest.”
“In addition, there is a similar budgetary support – low-interest funding from the African Development Bank (AfDB) and, clearly, there are ongoing discussions with foreign direct investors across many sectors.”
Edun also outlined the sources of international funding for the Nigerian economy, including diaspora remittances, foreign portfolio investments, and support from institutions like the World Bank and other international development partners.
The minister proposed issuing dollar-denominated securities tailored for Nigerians in the diaspora and those holding foreign-denominated savings within Nigeria as another strategy to boost foreign exchange inflows into the country.
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He emphasized the efforts of the fiscal sector in complementing recent monetary policy reforms by the Central Bank of Nigeria.
According to the minister, issuing government securities at interest rates closer to the CBN’s monetary policy rate demonstrates collaboration between both sectors of the economy in addressing inflation and attracting foreign exchange inflows.